East Energy Pipeline Project Earns Praise From Prime Minister

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QUEBEC - The Keystone XL pipeline would create jobs in Canada and the United States and ensure North American energy security, Stephen Harper said Friday after U.S. President Barack Obama suggested the long-lasting job effects would be minimal.

"In terms of the Keystone pipeline, the perspective of this government is very clear, it is very well known by everyone in Washington," the prime minister said in response to a reporter's question about Obama's remarks.

"Our No. 1 priority in Canada is the creation of jobs and clearly this is a project that will create jobs on both sides of the border. It is, in our judgment, an important project not just for our economy and job creation but for the long-term energy security of North America."

Harper didn't elaborate on how many jobs would result but has said previously that construction of the controversial 1,800-kilometre pipeline would create about 40,000 jobs.

The U.S. State Department draft environmental analysis agrees, but estimates only about 35 permanent and temporary jobs would remain once the pipeline is fully operational.

Obama told the New York Times in a recent interview that Keystone XL would create "maybe 2,000 jobs during the construction of the pipeline," and added with a chuckle it would sustain "somewhere between 50 and 100 jobs in an economy of 150 million working people."

If approved, the $7-billion pipeline would carry millions of barrels a week of Alberta oilsands bitumen as well as crude extracted from North Dakota's Bakken shale to Gulf Coast refineries.

Harper said it is important for Canadians to benefit from the country's energy products and that projects such as TransCanada Corp.'s Energy East venture are good in principle.

The Energy East pipeline would deliver up to 1.1 million barrels per day from Western Canada to refineries and export terminals in Quebec in late 2017 and New Brunswick one year later.

The $12-billion project, which still faces regulatory hurdles, has the support of the Alberta and New Brunswick governments but it's not clear yet whether Quebec has been won over.

"There are approval processes to look at environmental effects, the economic issues, to look at all those things and to come to independent evaluations," Harper told a news conference in Quebec City where he announced the redevelopment of an historic path in the city.

"But obviously we think it's a good idea in principle in terms of selling our energy products. We need to sell our energy products. It is, I think, a good idea that we find pan-Canadian solutions so that all of this country benefits from our energy products and that we enhance our own energy security."

He was aware of Quebecers' sensitivity concerning the transport of oil following the July 6 railway disaster in Lac-Megantic where fuel-laden tanker cars derailed and exploded, killing 47 people.

Harper insisted that any transportation projects in Canada will be subject to a rigorous independent analysis of environmental impact and safety issues.

"I think the reality of anybody who looks at the business is that the absolute safest way to tranport energy products is through pipelines," Harper said. "That's the safest way you can go."

Critics have already vowed to fight Energy East, which they describe as unsafe and unlikely to deliver on job creation and energy security promises. That position has, in part, led to repeated delays for the Keystone XL pipeline in the United States.

Warren Mabee, a Queen's University assistant professor specializing on energy issues, said Energy East is TransCanada's easiest option.

He pointed out TransCanada (TSX:TRP) is optimistic about the environmental assessment and already has some infrastructure in place.

"I think the fact they are moving more aggressively on Energy East now reflects the fact that not only is Keystone going slowly, but also there's a real, pent-up need for more pipeline capacity, particularly given the rail derailment in Lac-Megantic," Mabee said.

"There's better support for pipelines right now and I think they are trying to strike at that."

(By Nelson Wyatt in Montreal, with files from Julian Beltrame in Ottawa)